Tesla Converts xAI Investment into SpaceX Equity

Tesla converted a $2 billion investment originally intended for xAI into equity in Space Exploration Technologies Corp. The transition occurred after SpaceX acquired xAI as a wholly-owned subsidiary on February 2, 2026.

According to an S-1 filing, Tesla's right to acquire xAI Series E preferred stock was converted into SpaceX Class A common stock. SpaceX issued 3.8 million shares to Tesla on March 12, 2026. By May 1, 2026, Tesla's holdings totaled 18,990,195 SpaceX Class A shares, which represents less than 1.0% of the outstanding stock.

Separately, Tesla, SpaceX, and Intel are partnering on the Terafab initiative to produce one terawatt of compute hardware annually. This collaboration includes the development of a semiconductor research fab at the Gigafactory Texas campus. The overlap between Tesla's AI compute goals and SpaceX's foundry objectives has prompted shareholder concerns regarding cash allocation and potential conflicts of interest.